European Union Agreement on “Modification Standards” for Minimum Wages
There is a temporary agreement for the fairest minimum wage in the European Union. The members of the European Parliament and the European Council negotiated this matter late last night. If passed, the new law should improve working and living conditions for European workers and combat inequality.
EU member states and the European Parliament have agreed that the minimum wage should be updated every two years. The “standard of fitness” to which their consent refers in principle is much higher than in the Netherlands and many other countries.
The EU countries themselves set the minimum wage level and this varies slightly. Now that heating costs have skyrocketed and groceries are more expensive, many workers are also finding it difficult to make ends meet. The Netherlands, among other countries, has announced an increase and Germany has already done so recently.
But that stems from the agreement in principle reached by negotiators from the European Parliament and the governments of EU countries, says MEP Agnes Jongerius. The PvdA member represented Parliament at the consultation. She talks about “a clear signal that we should increase to €14 in the Netherlands”, because the minimum wage should be at least half of the average gross wage and 60 percent of the average gross wage. In the future, member states should take purchasing power into account.
Purchasing power will increase
According to ABN Amro Economist Pete Reitman, the fact that the minimum wage will come to around €14 is not only beneficial to low-paid employees. The wages of employees who now earn 14 euros an hour will also increase to 15 or 16 euros an hour. Therefore it is useful for larger groups of employees. But also for the economy as a whole. There will be affluent consumers and the purchasing power will increase as a result.
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But employers are less satisfied with the interim agreement. It costs more money. But the advantage is that consumers, including your company’s customers, are from now on get richer, says Reitman.
Employers also say that it will come at the expense of hiring. But research shows that’s not true, says the economist. “The increase in the minimum wage in Canada and the United Kingdom, the introduction of a minimum wage in Germany and an increase in the minimum wage for young people in the Netherlands all showed that there was no job loss.”
According to Reitman, it is also beneficial for understaffing. If you ask someone, what attracts you to go to work? People often say wages, but also secondary terms and meaning. So it’s a big deal, but wages definitely play a role in that, says Reitman.
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